Which instrument creates a lien in a deed conveying title?

• A. Mortgage
• B. Trust deed
• C. Warranty deed
• D. Quitclaim deed

Answer: (B)

A lien on real estate is created by the security instrument that pledges the property as collateral for a loan. When the deed conveys title to secure a loan, the instrument used is a deed of trust. It transfers legal title to a trustee while the borrower retains possession, and it encumbers the property with a lien in favor of the lender. This lien gives the lender a remedy if the loan isn’t repaid, often allowing foreclosure under the terms of the trust deed.

A mortgage also creates a lien, but it is not a deed; it’s a separate security instrument. A warranty deed and a quitclaim deed, on the other hand, are about transferring title and do not create a lien against the property.